Allegheny Power 2013 Annual Report Download - page 113
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98
Net Interest Expense (Income)
For the Years Ended December 31,
Net Interest Payable
As of December 31,
2013 2012 2011 2013 2012
(In millions) (In millions)
FirstEnergy $ 1 $ (4) $ (5) $ 9 $ 8
FES — (4) 1 1 1
FirstEnergy has tax returns that are under review at the audit or appeals level by the IRS (2011-2013) and state tax authorities.
FirstEnergy's tax returns for all state jurisdictions are open from 2009-2012. The IRS completed its audit of the 2011 tax year in
December 2013 and is in the process of preparing the final audit report. Tax years 2012-2013 are under review by the IRS. In August
2013 the IRS completed its audit of AE for tax years 2009 and 2010 and the final federal tax return for the period January-February
2011. For the remainder of the 2011 taxable year and future years, the AE companies are part of the FirstEnergy federal consolidated
group. State tax returns for tax years 2010 through 2012 remain subject to review in Pennsylvania, West Virginia, Maryland and
Virginia for certain subsidiaries of AE.
FirstEnergy has recorded as deferred income tax assets the effect of NOLs and tax credits that will more likely than not be realized
through future operations and through the reversal of existing temporary differences. As of December 31, 2013, the deferred income
tax assets, before any valuation allowances, consisted of $1.1 billion of federal NOL carryforwards that expire from 2025 to 2033,
federal AMT credits of $25 million that have an indefinite carryforward period, and $418 million of state and local NOL carryforwards
that begin to expire in 2014.
The table below summarizes pre-tax NOL carryforwards for state and local income tax purposes of approximately $9.8 billion for
FirstEnergy, of which approximately $6.3 billion is expected to be utilized based on current estimates and assumptions. The ultimate
utilization of these NOLs may be impacted by statutory limitations on the use of NOLs imposed by state and local tax jurisdictions,
changes in statutory tax rates, and changes in business which, among other things, impact both future profitability and the manner
in which future taxable income is apportioned to various state and local tax jurisdictions.
Expiration Period FirstEnergy FES
(In millions)
State Local State Local
2014-2018 $ 14 $ 2,289 $ 8 $ 1,243
2019-2023 2,513 — 23 —
2024-2028 2,051 — 60 —
2029-2033 2,891 — 752 —
$ 7,469 $ 2,289 $ 843 $ 1,243